Mortgage borrowers have more credit score options
Mortgage borrowers have more credit score options
A policy shift at Fannie Mae and Freddie Mac allows lenders to use FICO or VantageScore when considering loan applicants
Mortgage borrowers have more credit score options
A policy shift at Fannie Mae and Freddie Mac allows lenders to use FICO or VantageScore when considering loan applicants
10.29.2026
Key takeaways
- VantageScore 4.0 factors in recent credit behavior and can include alternative data like rent and utility payments.
- FICO scores had been the preferred Fannie and Freddie model for decades before recent policy changes.
- Lenders decide which model to use, but borrower awareness and access to scores can help them save.
Changes to mortgage credit scoring rules are giving lenders more options — and borrowers more reason to understand which models are being used when they apply for home loans.1
Lenders selling mortgages to Fannie Mae and Freddie Mac now have more flexibility to use VantageScore 4.0 model as an alternative to traditional FICO scores.2
For decades, Fannie and Freddie lenders used only traditional FICO scores to assess applicants. A 2025 policy change gave some lenders the option of choosing VantageScore 4.0 — which relies on alternative data sources like rent and utility payments — or classic FICO. Last month, the Vantage option was made available to all Fannie and Freddie lenders alongside FICO.3
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That change gives potential mortgage borrowers another way to demonstrate creditworthiness at a time when both home prices and mortgage rates remain elevated.4
But borrowers should know that Fannie and Freddie themselves aren’t mortgage lenders. They purchase and package loans into mortgage-backed securities that get sold to investors with government guarantees.5
The ultimate decision on using FICO or VantageScore 4.0 will be made by the lenders that sell them loans. Borrowers can request a particular model or find lenders that use one or the other — or both as some lenders do.6
Credit scores and alternative data
Most lenders still use FICO scores, but VantageScore has also grown in popularity in recent years.7
In addition to using so-called like rent and utility payments, Vantage VantageScore 4.0 analyzes 24 months of balance and payment data. Classic FICO offers a snapshot at a single moment.8
Vantage as created in 2006 by the three major credit reporting bureaus Experian, Equifax, and TransUnion — which also provide their data to Fair Isaac Corp. for FICO scores.9
FICO, founded in 1958, says its scoring models are used by more than 90% of top lenders for all types of credit.10 It was the mortgage industry standard in 1995 when Fannie and Freddie mandated its use for loans guaranteed by them.11
Both FICO and VantageScore produce scores on the 300–850 scale, but they can yield different numbers for the same borrower because they rely on their own unique algorithms and weigh elements of a person's credit history in different ways.
Read more: What is the average credit score? See how you compare
Mortgage lenders get credit score
A 2018 law required the FHFA — Fannie and Freddie’s regulator — to consider alternative credit scoring.12 Another newer credit score model, FICO 10T, uses similar alternative sources like rent and could be deployed for use in the coming months.13
A strong history of timely rent and utility payments can be a good signal of a borrower’s potential ability to do the same with a mortgage.14 But several other types of payments such as credit cards and loans also factor into credit scoring, along with other components like debt balances.
Still, the move toward new credit scoring methods could have broad implications because Fannie and Fredde are responsible for about half of mortgage originations in the U.S.15 The two companies back single-family conventional loans up to $832,500 in most areas of the U.S., and up to $1.25 million in high-cost housing areas.
Read more: New Fannie and Freddie loan limits are set for 2026. Here’s how they work
What borrowers should know about credit scores
Awareness of credit score models can help borrowers. Credit card companies, banks and other lenders often offer free FICO scores to their customers, and some banks and online financial sites also offer VantageScore for free.16
Borrowers can ask lenders to use either scoring model, but the choice ultimately rests with the lender. Alternatively, borrows can seek out lenders that have stated they will use a particular scoring model.17
It’s also important to note that credit scores are just one component of a lender’s decision to approve a mortgage. Several factors including down payments, annual income, savings, and total debt play a part in loan approvals and terms.18
Shopping around can be a good idea regardless of credit score models used by lenders. Homebuyers can potentially save $600 to $1,200 a year by applying for mortgage from multiple lenders, according to Freddie Mac.19
Read more: Who needs perfect? For credit scores it pays to be the in the ballpark
1 The Wall Street Journal, “The Simple Request That Could Lower Your Mortgage Rate,” September 2026.
2 CNBC, “Mortgage credit scores are evolving. What homebuyers need to know,” September 2026.
3 Ibid.
4 MarketWatch, “Want the lowest mortgage rate you can get? Credit-scoring changes mean home buyers need a new strategy,” April 2026.
5 Fannie Mae, “About Us,” accessed October 2026.
6 The Wall Street Journal, “The Simple Request That Could Lower Your Mortgage Rate,” September 2026
7 National Mortgage Professional, “Fannie, Freddie Now Allow Lenders to Use VantageScore 4.0,” July 2025.
8 MarketWatch, “Want the lowest mortgage rate you can get? Credit-scoring changes mean home buyers need a new strategy,” April 2026.
9 The New York Times, “Mortgage Lenders Can Use a Second Credit Score. Is That Good for Borrowers?” July 2025.
10 FICO, “FICO® Score Credit Insights Report: Average FICO Score Holds Steady at 714 as Consumers Show Resilience,” August 2026.
11 Bloomberg, “Fair Isaac Drops as Pulte Lets Fannie, Freddie Use VantageScore,” July 2025.
12 USA Today, “Fannie and Freddie may use new credit scores. Will it help you get a mortgage?” July 2025.
13 Federal Housing Finance Agency, “Credit Scores,” October 2026.
14 MarketWatch, “Want the lowest mortgage rate you can get? Credit-scoring changes mean home buyers need a new strategy,” April 2026.
15 Columbia Business School, “The Future of Fannie Mae and Freddie Mac: Privatization, Conservatorship, and the Limits of Demand-Side Housing Policy,” February 2026.
16 The New York Times, “Mortgage Lenders Can Use a Second Credit Score. Is That Good for Borrowers?” July 2025.
17 The Wall Street Journal, “The Simple Request That Could Lower Your Mortgage Rate,” September 2026.
18 Consumer Financial Protection Bureau, “Does my credit score affect my ability to get a mortgage loan or the mortgage rate I pay?” November 2024.
19 Freddie Mac, “When Rates Are Higher, Borrowers Who Shop Around Save More,” February 2023.
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